half year results 2012 - bunzl · foodhandler april 2012 usa foodservice £68m service paper june...

2012 Half Year Results Presentation-0-

HALF YEAR RESULTS 2012


Agenda

1. Philip Rogerson, Chairman: Welcome

2. Brian May, FD: Financial Results

3. Michael Roney, CEO: Business Review

4. Q&A


Highlights

*Before intangible amortisation, acquisition related costs and disposal of business

Strong set of results

Proven strategy

Six acquisitions announced

Adjusted earnings per

share up 10%*

Dividend up 9%


Agenda




4. Q&A

2012 Half Year Results Presentation-4-*Before intangible amortisation and acquisition related costs

£m June 12% June 11% Reported

Constant

Exchange

Revenue 2,612.2% 2,442.0% 7 7

Operating profit* 165.1% 152.2% 8 9

Margin* 6.3% 6.2%

Income Statement

Growth %


£m June 12) June 11) Reported

Constant

Exchange

Operating profit*

Net finance cost

165.1)

(13.4)

152.2)

(13.4)

8 9

Profit before tax†

Interest cover (x)

Effective tax rate (%)

Adjusted earnings per share† (p)

Dividend per share (p)

151.7)

12.3)

27.7)

33.7)

8.80)

138.8)

)

11.4)

27.7)

31.0)

8.05)

9

9

9

10

10

Income Statement

Growth %

*Before intangible amortisation and acquisition related costs†Before intangible amortisation, acquisition related costs and disposal of business


Net debt/EBITDA (x) 1.8 1.7 2.0

Return on operating capital (%) 58.4 57.4 54.8

Balance Sheet

£m June 12) Dec 11) June 11)

Intangibles 1,252.3) 1,256.8) 1,291.7)

Tangibles 112.5) 109.0) 120.6)

Working capital 464.0) 403.3) 445.6)

Other liabilities (301.5) (235.2) (262.2)

1,527.3) 1,533.9) 1,595.7)

Pension deficit (66.0) (74.3) (52.1)

Net debt* (685.3) (652.9) (726.5)

Equity 776.0) 806.7) 817.1)

*See Appendix 1


Cash Flow

£m June 12)% June 11)%

Operating cash flow* 122.3)% 130.6)%

Interest (15.3)% (14.1)%

Tax (29.8)% (29.1)%

Free cash flow 77.2%) 87.4)%

Dividends (26.1)% (16.6)%

Acquisitions (77.2)% (56.0)%

Employee share schemes (15.5)% (24.4)%

Net cash flow (41.6)% (9.6)%

)

*See Appendix 2


Financial Summary

Capital

management

EPS and

Dividend

Revenue

and

Profit

† At constant exchange rates

*Before intangible amortisation and acquisition related costs

**Before intangible amortisation, acquisition related costs and disposal of business

• Return on average operating capital up 360bp to 58.4%

• Net debt to EBITDA ratio 1.8x with £77m cash outflow on acquisitions

• Facilities’ headroom in excess of £600m

• Adjusted EPS** growth 10%†

• Dividend increase 9%

• Revenue growth 7%†, organic growth 4%†

• Operating profit* up 9%†

• Operating margin* up 10bp


Agenda




4. Q&A


Business Review

1. Operations Review

2. Strategy

3. Acquisitions

4. Prospects


Revenue Growth Bridge

2,294 2,442

2,437

2,612

(1.4)%

4.3%

4.3%

1,500

1,700

1,900

2,100

2,300

2,500

2,700

Revenue HY 11 (FX adjusted)

Organic Acquisitions Disposal Revenue HY 12

£m7.2%


Revenue

*Before intangible amortisation and acquisition related and corporate costs

H1 Business Area Analysis

Operating profit*

North America Continental Europe Rest of the WorldUK & Ireland

53%

21%

48%

28%

54%

21%

18%

7%

49%

26%

16%

9%


Overview

• Continued strong results

• Strong organic revenue growth in North America and ROW

• Acquisition-led growth in Continental Europe

• Improved performance in UK & Ireland

• Improvement in Group operating margin

• Resilient business model

• Annualised revenue from 2012 acquisitions of £157m


• Strong organic revenue growth

• Strong growth in Grocery, our largest sector

• Expansion in imports and private label products and programmes

• Food Processor business delivered excellent sales gains

• Cool Pak and Netpak together give us a strong market position

• Three acquisitions in 2012 strengthen our business


Constant

Exchange

Revenue 1,403.4% 1,286.7% 9 7


Margin* 6.1% 6.1%

Return on operating capital 67.1% 62.4%

North America

Growth %



• Revenue growth bolstered by acquisitions

• France

• Pressure in the cleaning and hygiene sector

• Good sales and profit growth in our PPE business

• Benelux

• Continued good growth

• Majestic integrated well

• Spain

• Slowdown in industrial and construction has affected PPE

• Improved profitability in cleaning and hygiene*Before intangible amortisation and acquisition related costs

Continental Europe


Constant

Exchange

Revenue 545.6% 526.1% 4 10


Margin* 8.4% 8.5%


Growth %


• Improved organic growth and overall performance

• Continued focus on costs and improvement in operating margin

• Demand for safety products has been weak

• Good growth in cleaning and hygiene

• Catering and hospitality businesses show good growth

• Improved performance in healthcare

UK & Ireland


Constant

Exchange

Revenue 479.4% 485.6% (1) (1)

Operating profit* 27.4% 25.8% 6 6)

Margin* 5.7% 5.3%


Growth %



• Excellent organic growth

• Australasia

• Strong performance in largest business

• First entry into the redistribution sector through Star Services

• Brazil

• Substantial growth in revenue and operating profit

• Danny and Ideal integrating well

Rest of the World


Constant

Exchange

Revenue 183.8% 143.6% 28 29


Margin* 8.3% 8.5%


Growth %



Consistent and proven strategy

Acquisition Growth

Strategy

ROIC

18.0%

GDP+ Organic Growth

Operating Model

Efficiencies

Acquisition Growth

2012 Half Year Results Presentation

*Annualised and converted at average exchange rates-19-

Business Acquired Country Sector Revenue*

CDW Merchants Feb 2012 USA Non-food retail £10m

Star Services April 2012 Australia Foodservice £8m

Zahav April 2012 Israel Foodservice £12m

Foodhandler April 2012 USA Foodservice £68m

Service Paper June 2012 USA Grocery / Foodservice £39m

Distrimondo June 2012 Switzerland Foodservice / C&H £12m

Acquisition Growth

Strong period for acquisitions


Acquisition Track Record

04-05 continuing operations only

Average spend £154m p.a. - promising pipeline

2004 2005 2006 2007 2008 2009 2010 20112012

ytd

Number of Acquisitions 7 7 9 8 7 2 9 10 6

Acquisition Spend (£m) 302 129 162 197 123 6 126 185 77

Annualised Acquisition

Revenue (£m)430 270 386 225 151 27 154 204 157


Key Acquisition Parameters

B2B Goods not for

resale

Further market

consolidation and

synergies

Opportunity for

“own label”

products

Consolidated

product offering

(“one stop shop”)

Fragmented

customer baseSectors with growth

Small % of total

customer spend

Attractive financial

returns

(ROIC, ROACE)


Supplier base

“BIG and STRONG in the

middle”Customers

Strategic Direction

Strong competitive position


Potential New Countries

Europe

Austria

Baltic States

Croatia

Finland

Norway

Poland

Slovenia

Sweden

South America

Chile

Colombia

Peru

Asia/ROW

Singapore

Turkey


Why Invest in Bunzl?

“…. because Bunzl is the leader in the

market with consistent growth, stable

operating margins, a very high return on

operating capital and it turns on average

more than 90% of the operating profit into

cash which can be reinvested at a rate in

excess of the cost of capital.”


Revenue (£bn)

2.4

2.9

3.33.6

4.2

4.64.8

5.1

2004 2005 2006 2007 2008 2009 2010 2011

Operating profit (£m)

183

218

241259

297312

323

353

2004 2005 2006 2007 2008 2009 2010 2011

32.1

38.741.7

45.1

52.755.9

60.6

68.5

2004 2005 2006 2007 2008 2009 2010 2011

04-05 continuing operations only Before amortisation and acquisition

related and corporate costs

04-05 continuing operations only

As reported

Adjusted eps (p)

Financial Track Record

13.3

15.717.0

18.7

20.621.6

23.4

26.4

2004 2005 2006 2007 2008 2009 2010 2011

As reported

Dividend per share (p)

All CAGRs 10% or more


Prospects

Continued good growth

• Difficult market conditions, expect revenue growth driven

principally by impact from acquisitions

• Continued good growth

• Stable operating margin

• Improved performance despite sluggish economy

• Continued strong results

• Promising pipeline for acquisitions

North

America

Continental

Europe

UK &

Ireland

Rest of

the World

Group


HALF YEAR RESULTS 2012


Appendix 1 - Net Debt

£m Six months)

to June 12)

Year to)

Dec 11)

Opening net debt (652.9) (716.8)

Net cash (outflow)/inflow (41.6) 63.0)

Currency 9.2) 0.9)

Closing net debt (685.3) (652.9)


£m June 12)% Dec 11)% June 11)%

Operating profit*

Depreciation

Working capital movement

Other

Cash flow from operations

Net capital expenditure

Operating cash flow

Operating cash flow to operating profit*

165.1)%

11.4)%

(41.7)%

(1.4)%

133.4%)

(11.1)%

122.3%)

74%)

335.7)%

25.4)%

31.4)%

(2.4)%

390.1%)

(20.9)%

369.2%)

110%)

152.2)%

13.2)%

(19.6)%

(4.2)%

141.6%)

(11.0)%

130.6%)

86%)


Appendix 2 – Cash Flow


Appendix 3 – Historical Cash Flow

93%95%

92%

103%

92%

102%

93%

110%

2004** 2005** 2006 2007 2008 2009 2010 2011

Average Cash Conversion* 98%

** 04-05 continuing operations only

* Operating cash flow after capex to operating profit before intangible

amortisation and acquisition related costs


Appendix 4 - Exchange Rates

June

2012

December

2011

June

2011

Average rate

US$ 1.58 1.60 1.62

€ 1.22 1.15 1.15

Closing rate

US$ 1.57 1.55 1.61

€ 1.24 1.20 1.11


Appendix 5 - 2011 Markets We Serve

Diversified by customer markets – 80% resilient

Non-Food Retail 8%

Safety 8%

Cleaning & Hygiene 14%

Foodservice 29%

Grocery 30%

Healthcare 7%

Other 4%


Appendix 6 - Historical Data

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Revenue (£m) 1,783 2,129 2,231 2,276 2,439 2,924 3,333 3,582 4,177 4,649 4,830 5,109

Operating

profit* (£m) 117 147 152 158 169 203 226 243 281 296 307 336

Margin* (%) 6.6 6.9 6.8 6.9 6.9 7.0 6.8 6.8 6.7 6.4 6.4 6.6


00–03 UK GAAP; 04 onwards IFRS

00–05 continuing operations only


This document has been prepared by Bunzl plc (the “Company”) solely for use at the presentation of

the Company’s results announcement in respect of the half year ended 30 June 2012. For the

purposes of this disclaimer, “Presentation” shall mean this document, the oral presentation of the

slides by the Company and related question-and-answer session and any materials distributed at, or

in connection with, that presentation.

The Presentation does not constitute or form part of and should not be construed as, an offer to sell

or issue, or the solicitation of an offer to buy or acquire, securities of the Company in any jurisdiction

or an inducement to enter into investment activity. No part of this Presentation, nor the fact of its

distribution, should form the basis of, or be relied on or in connection with, any contract or

commitment or investment decision whatsoever.

The Presentation contains forward-looking statements. They are subject to risks and uncertainties

that might cause actual results and outcomes to differ materially from the expectations expressed in

them. You are cautioned not to place undue reliance on such forward-looking statements which

speak only as of the date hereof. The Company undertakes no obligation to revise or update any

such forward-looking statements.

The information and opinions contained in this Presentation do not purport to be comprehensive, are

provided as at the date of the Presentation and are subject to change without notice. The Company

is not under any obligation to update or keep current the information contained herein.

Disclaimer

half year results 2012 - bunzl · foodhandler april 2012 usa foodservice £68m service paper june...

Documents